HOLMES MILL, Ky.—The U.S. Postal Service plays two roles in America: an agency that keeps rural areas linked to the rest of the nation, and one that loses a lot of money.

Now, with the red ink showing no sign of stopping, the postal service is hoping to ramp up a cost-cutting program that is already eliciting yelps of pain around the country. Beginning in March, the agency will start the process of closing as many as 2,000 post offices, on top of the 491 it said it would close starting at the end of last year. In addition, it is reviewing another 16,000—half of the nation's existing post offices—that are operating at a deficit, and lobbying Congress to allow it to change the law so it can close the most unprofitable among them. The law currently allows the postal service to close post offices only for maintenance problems, lease expirations or other reasons that don't include profitability.

The news is crushing in many remote communities where the post office is often the heart of the town and the closest link to the rest of the country. Shuttering them, critics say, also puts an enormous burden on people, particularly on the elderly, who find it difficult to travel out of town.

The postal service argues that its network of some 32,000 brick-and-mortar post offices, many built in the horse-and-buggy days, is outmoded in an era when people are more mobile, often pay bills online and text or email rather than put pen to paper. It also wants post offices to be profitable to help it overcome record $8.5 billion in losses in fiscal year 2010.

A disproportionate number of the thousands of post offices under review are in rural or smaller suburban areas, though the postal service declined to provide any estimate on how many beyond those slated to begin closure in March might ultimately close or which ones are being targeted. "We want to make the smartest decisions possible with the smallest impact on communities," Dean Granholm, vice president for delivery and post office operations, said in an interview. He said the agency is identifying locations that are operating at a deficit and looking "for the opportunity to start the process of closing."

In addition to reducing employees—it has cut staffing by a third since 1999— the postal service has sought for years to deal with financial woes by raising rates or cutting services, such as a proposal to drop Saturday delivery. It has also talked in the past about closing a much smaller number of post offices. But while closures have been "on the table" in the past, this push is the agency's most serious yet, Granholm said, and is drawing widespread interest from a cost-cutting Congress. Still, shutting down post offices is often politically unpopular: elected officials in several communities have already written the Postal Regulatory Commission protesting planned closures.

Some lawmakers say closing post offices is the wrong answer. Sen. Susan Collins (R., Maine) says the agency should instead cut waste in its ranks. Although the postal service has cut its work force through attrition in recent years, it is still weighed down by overly generous employee benefits, she says.

Postal workers pay "significantly" lower premiums for their health and life insurance plans than other government employees because of union agreements, according to a September study sponsored by the Office of Inspector General. The report said the postal service could save $700 million this year alone by asking employees to pay more. The report, however, also said the postal service's contribution into employee benefits has started to decline, and that more reductions are planned as a result of recent union agreements.

"One of my frustrations is that the first approach the post office seems to take is to reduce service…when instead it needs to tackle a benefit structure that is too expensive, and it needs to look for ways to stay in business and deal with the digital age," says Sen. Collins.

a bit differnt than saying it's great and since it's been around for 200 + years and every developed country has a postal service it's a pretty safe bet to say that it's going to exist after we're all dead

a bit differnt than saying it's great and since it's been around for 200 + years and every developed country has a postal service it's a pretty safe bet to say that it's going to exist after we're all dead

So is welfare, aid to countries that support terrorism and stupidity. That doesn't mean any of the aforementioned should be encouraged or invested in.

his point was simply b/c something has been around for a long time or is a constant doesnt mean its doing fine or worthy of investment

that was his point

No Tony- he's right. My point is that because the post office has been losing tons of money due to incompetence and fiscal mismanagement, Americans should invest as much money as possible into maintaining its existence because its been around for a long time. See how much more sense his position makes than yours?

No Tony- he's right. My point is that because the post office has been losing tons of money due to incompetence and fiscal mismanagement, Americans should invest as much money as possible into maintaining its existence because its been around for a long time. See how much more sense his position makes than yours?

NEW YORK (CNNMoney) -- The U.S. Postal Service warned Wednesday that it may default on some of its financial obligations later this year after reporting yet another quarterly loss.

The USPS, a self-supporting government agency that receives no tax dollars, said it suffered a loss of $329 million in the first quarter of federal fiscal year 2011. That compared with a loss of $297 million a year earlier.

The agency has been suffering from an ongoing decline in mail volume, which has undercut revenues, while retiree health care costs have been straining its reserves.

Excluding costs related to retiree benefits and adjustments to workers' compensation liability, the Postal Service said it had net income was $226 million in the first quarter, which ended Dec. 31.

Despite ongoing cost-cutting efforts, the USPS said it expects to have a cash shortfall this year and to hit its federally mandated borrowing limit by September, when the government's fiscal year ends.

All first-class stamps to be 'Forever' stampsThe agency said it will be forced to default on some of its financial obligations this year unless Congress changes a 2006 law requiring it to pay between $5.4 and $5.8 billion into its prepaid retiree health benefits each year.

"The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model," Patrick Donahoe, the Postmaster General, said in a statement. "We are eager to work with Congress and the administration to resolve these issues prior to the end of the fiscal year."

The Postal Service has taken a number of steps to increase revenue, including marketing initiatives and price increases. The agency raised rates an average of 3.6% in January.

It is also perusing more dramatic changes. Last year, the USPS submitted a request to the Postal Regulatory Commission, which oversees the agency, to eliminate Saturday mail service. The commission has yet to respond to the request, but a spokesman said it is in the "final phase" of making its decision.

The USPS has also cut back on hours to save money. The agency expects to eliminate 40 million work hours this fiscal year as part of a plan to save $2 billion.

However, the service is currently negotiating new contracts with the American Postal Workers Union and the National Rural Letter Carriers Association, which will probably object to cutting hours.

On the bright side, the Postal Service said improving economic conditions suggest the "worst of the precipitous volume decline during the recession is over." But mail volume continues to be anemic, rising only 1.5% in the first quarter as economic growth remains sluggish.

There is established in the Treasury of the United States a revolving fund to be called the Postal Service Fund which shall be available to the Postal Service without fiscal-year limitation to carry out the purposes, functions, and powers authorized by this title (other than any of the purposes, functions, or powers for which the Competitive Products Fund is available).

There is established in the Treasury of the United States a revolving fund to be called the Postal Service Fund which shall be available to the Postal Service without fiscal-year limitation to carry out the purposes, functions, and powers authorized by this title (other than any of the purposes, functions, or powers for which the Competitive Products Fund is available).

you should stop laugihing so much and take the time to look at more than the first link on google

The USPS does get some taxpayer support. Around $96 million is budgeted annually by Congress for the "Postal Service Fund." These funds are used to compensate USPS for postage-free mailing for all legally blind persons and for mail-in election ballots sent from US citizens living overseas. A portion of the funds also pays USPS for providing address information to state and local child support enforcement agencies, and for keeping some rural posts offices in operation.

The USPS does get some taxpayer support. Around $96 million is budgeted annually by Congress for the "Postal Service Fund." These funds are used to compensate USPS for postage-free mailing for all legally blind persons and for mail-in election ballots sent from US citizens living overseas. A portion of the funds also pays USPS for providing address information to state and local child support enforcement agencies, and for keeping some rural posts offices in operation.

correct my friend which means that in addition to any money borrowed against the US tax payer they also get 96 million every year...

Apparently the USPS has been overpaying it's pension system, my 50 billion at the most recent count.

They are stuck with a relic of a pension system (which is a problem for other business as well as governments).

________________________________________About the U.S. Postal Service

A Very "Business-like" Semi-governmental AgencyBy Robert Longley, About.com Guide

.Early History of the U.S. Postal ServiceThe United States Postal Service1 first began moving the mail on July 26, 1775, when the Second Continental Congress named Benjamin Franklin as the nation's first Postmaster General. In accepting the position, Franklin dedicated his efforts to fulfilling George Washington's vision. Washington, who championed a free flow of information between citizens and their government as a cornerstone of freedom, often spoke of a nation bound together by a system of postal roads and post offices.

Publisher William Goddard (1740-1817) first suggested the idea of an organized U.S. postal service in 1774, as a way to pass the latest news past the prying eyes of colonial British postal inspectors.

Goddard formally proposed a postal service to Congress nearly two years before adoption of the Declaration of Independence. Congress took no action on Goddard's plan until after the battles of Lexington and Concord in the spring of 1775. On July 16, 1775, with revolution brewing, Congress enacted the "Constitutional Post" as a way to ensure communication between the general populace and the patriots preparing to fight for America's independence. Goddard was reported to have been deeply disappointed when Congress chose Franklin as Postmaster General.

The Postal Act of 1792 further defined the role of the Postal Service. Under the act, newspapers were allowed in the mails at low rates to promote the spread of information across the states. To ensure the sanctity and privacy of the mails, postal officials were forbidden to open any letters in their charge unless they were undeliverable.

For a complete history of the early Postal Service, visit the USPS Postal History web site2.

The Modern Postal Service: Agency or Business?Until adoption of the Postal Reorganization Act of 1970, the U.S. Postal Service functioned as a regular, tax-supported, agency of the federal government.

According to the laws under which it now operates, the U.S. Postal Service is a semi-independent federal agency, mandated to be revenue-neutral. That is, it is supposed to break even, not make a profit.

In 1982, U.S. postage stamps became "postal products," rather than a form of taxation. Since then, The bulk of the cost of operating the postal system has been paid for by customers through the sale of "postal products" and services rather than taxes.

Each class of mail is also expected to cover its share of the costs, a requirement that causes the percentage rate adjustments to vary in different classes of mail, according the costs associated with the processing and delivery characteristics of each class.

According to the costs of operations, U.S. Postal Service rates are set by the Postal Regulatory Commission3 according to the recommendations of the Postal Board of Governors4.

Look, the USPS is an Agency!The USPS is created as a government agency under Title 39, Section 101.15 of the United States Code which states, in part:

(a) The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people. It shall provide prompt, reliable, and efficient services to patrons in all areas and shall render postal services to all communities. The costs of establishing and maintaining the Postal Service shall not be apportioned to impair the overall value of such service to the people.

Under paragraph (d) of Title 39, Section 101.16, "Postal rates shall be established to apportion the costs of all postal operations to all users of the mail on a fair and equitable basis."

No, the USPS is a Business!the Postal Service takes on some several very non-governmental attributes via the powers granted to it under Title 39, Section 4017, which include:

•power to sue (and be sued) under its own name;

•power to adopt, amend and repeal its own regulations;

•power to "enter into and perform contracts, execute instruments, and determine the character of, and necessity for, its expenditures";

•power to buy, sell and lease private property; and,

•power to build, operate, lease and maintain buildings and facilities.

All of which are typical functions and powers of a private business. However, unlike other private businesses, the Postal Service is exempt from paying federal taxes. USPS can borrow money at discounted rates, and can condemn and acquire private property under governmental rights of eminent domain.

The USPS does get some taxpayer support. Around $96 million is budgeted annually by Congress for the "Postal Service Fund." These funds are used to compensate USPS for postage-free mailing for all legally blind persons and for mail-in election ballots sent from US citizens living overseas. A portion of the funds also pays USPS for providing address information to state and local child support enforcement agencies, and for keeping some rural posts offices in operation.

Under federal law, only the Postal Service can handle or charge postage for handling letters. Despite this virtual monopoly worth some $45 billion a year, the law does not require that the Postal Service make a profit -- only break even. Still, the US Postal Service has averaged a profit of over $1 billion per year in each of the last five years. Yet, Postal Service officials argue that they must continue to raise postage at regular intervals in order make up for the increased use of email.